Marui Group Co Ltd Ord

So now we are starting the financial results briefing for March 2025 for Marie Group. So you are able to download today's presentation on materials from our corporate site. So please look at the overview of performance. So today we will spend the first 30 minutes for explanation of the presentation and then take your questions. Since we are explaining the future direction forward more in details, so some of the results information of businesses are included in the appendix. Today, we have Director Senior Managing Executive Officer and CFO Kato to explain the financial results overview and forecast for March 2026. and followed by the Business Management Vision and Strategic Story 2031 will be explained by President and Representative Director Aoi. In addition to these two members, we will have IR Manager Udaka to be here to answer your questions. So this is what we covered today. First, I will pass the floor over to CFO Kato.

I am Kato. I will explain the outline of the financial performance for fiscal year ended March 25 and outlook of next fiscal year. There are three KPIs. EPS was 143.2 yen, 10% increase. ROE, 10.6%. surpassed 10.10% in 34 years. ROIC was 3.8%. Consolidated operating income increased 9% to 44.5 billion yen, short 500 million yen to the plan. Retailing profit increased by 1.6 billion yen, 100 million yen gap to the plan. Fintech increased profit by 1.7 billion, short of 400 million yen to the plan. Net income recovered to pre-COVID level and 26.6 billion yen increased by 8%. These are three KPIs, EPS 143.2 yen, ROE higher than 10%, ROIC and also surpassed WACC. Group total group transactions expanded steadily and reached new record. Operating profit 44.5 billion yen higher by 3.5 billion yen year-on-year. Net income 26.6 billion yen, 1.9 billion yen increase. Retailing plus 1.6 billion, fintech plus 1.8 billion, total company plus 200 million, the increase of profit by 3.5 billion. This is the retailing. This is the gap of the operating income. Retailing, tenant $1.7 billion, event $300 million increase, and Interior work and related business progressed well and retailing segment increased profit by 1.6 billion. This is tenant revenue. Next is fintech operating profit. Along with the expansion of the transaction, income increased, and we revisited the point program and suppressed the cost. Therefore, profit increased by $1.7 billion. From the previous forecast, the income reduced by 300 million due to reduction of the transaction, and we executed expense such as UX improvement. This is card credit transaction. The transaction value achieved record high amounted to ¥1,151.7 billion. This is the merchant commission rate. In the second half, the commission rate was 1.21% and has been stable. Installment and revolving commission, Year-on-year, trend was 110% and 59.6 billion yen of commission revenue, 8% increase. This is co-creation investment, 1.1 billion to start-up and 900 million to fund. Total of 2 billion was invested. and $3.1 billion contribution to the main business. IRR of startup companies was 10%, same as hurdle rate. This is non-operating and extraordinary. P&L operating profit increased by 9%, $3.5 billion increase year-on-year. Ordinary profit increased 3%, major factor. The increase of finance cost of 1.8 billion and interest rate rise impact was 1.6 billion. Extraordinary profit. There were sale of shareholding and idle. real estate, and all in all, versus last year, it was plus $4.9 billion. The net income increased by 8% to $26.6 billion. This is balance sheet and capital allocation. Balance sheet total asset, due to increase of the Operating accounts receivable, it reached 1,053.4 billion yen. Shareholders' equity ratio was 23.4%. Capital allocation, basic operating cash flow, 49.7 billion yen. and borrowing of $8.2 billion was allocated, and $57.9 billion was allocated to growth and shareholder return. $19.9 billion to growth, $18.5 billion to share buyback, and $19.5 billion to dividend. Next is the outlook for next year.

EPS is expected to increase 8% to 155 yen, ROE to 11.2%, and ROE to 3.9%, all of which are expected to exceed the previous year. We are aiming for the group's total transaction volume to exceed 5 trillion yen, operating profit to increase 12% to 50 billion, and net profit. to increase 5% to 28 billion yen. Ordinary profit forecast, while operating profit expected to increase by 5.5 billion yen, non-operating income and expenses will be down 3.3 billion yen from the previous year due to factors such as increased financial expenses caused by rising interest rate and ordinary profits to increase 5% to 42 billion yen. Operating profit by segment, retail is to increase 28% to 11 billion and fintech is to go up by 7% to 47 billion yen. Here's a breakdown of profit increase in the retail segment. We expect a profit increase of 2.4 billion yen mainly due to the expansion of tenant income and events. Fintech, we expect an increase in profits of 2.9 billion yen due to an increase in merchant fees and installment payment fees accompanying the expansion of transaction volume. The fiscal year ending March 2026 is going to be the final year of the current midterm plan. So let me recap on the current midterm plan. So the current midterm plan started back in March 22. So we tried to improve the corporate values by impacting capital policies and business strategies. The impact was actually including supporting each individual interest and also innovation of the working style in the organization. However, we weren't able to incorporate innovation in sustainable consumption and lifestyle. In capital policy, we completed optimization of shareholder equity and achieving our desired balance sheet. In order to improve capital efficiency and achieve long-term stable increase in dividend, we introduced a DOE in the fiscal year ended March 2024, and dividend doubled compared to March 23 in the net income. And this year, we had a dividend increase for 13 years in a row. Business strategies, basically everything, operating profit moved as planned. including measures for the retail, which does not sell. The fintech saw a delay in recovery from COVID, and we saw the slowness in adding new members. But we struggled in the new businesses while we made the investment in co-creative future investments. These are the major KPIs, the midterm plan. We failed to accomplish the three KPIs, the EPS, RE, ROIC. Operating profit, we fell short of the consolidated target level by 10 billion yen due to the minus 6 billion in fintech. And this is the progress of major three KPIs. So March 25, KPI result, which is in the fourth year midterm plan, we basically accomplished the third year plan one year behind. So as an extension of current midterm plan, the final year targets for the midterm plan is going to be delayed by a couple of years. So considering this current situation, we have actually reset the targets starting from March 2026. So we'll be able to have a restart of a new midterm plan to increase the corporate value. So the new midterm plan will be explained by our... in a business management vision and strategic story. That's all from me. Thank you for your attention. So next, we want to invite the President Aoi to explain the vision. Hello, this is Aoi speaking. Let me explain our management vision and strategic story 2031. Thank you for your attention. So towards 2031, which marks our 100th anniversary since the founding of Murray Group, we have set out the management vision and strategic story. We will explain our business strategies and impact goals for retail and fintech at our IR day on June 6th. Here's the digest, the summary. By shifting our business to support what we ski, which is individual interest, we'll realize a vision of overcoming the dichotomy between impact and profit and achieve high growth and high returns. So trying to get to 10 trillion yen, which is double the current level of transaction volume, we aim to accomplish high growth of over 12% per annum. And we also set high return of TSRs 12% or higher as a target, so we can actually increase our corporate value with a price to book of three to four times. So let me go over these agenda items one by one today. First of all, the basically economy driven by Suki, the individual interests. Under deflationary economy, the consumers have increasingly been inclined to make cost-effective purchases to protect their livelihood. At the same time, companies have also been aggressively competing on costs to get a share of the limited market. Meanwhile, issues such as environment, various social issues, and people's happiness have been left outside of the scope of the economy. So this situation has created a sense of stagnation in society, exhausted workers, and made young people feel anxious about the future. However, at this situation, is approaching a turning point as signs of escaping deflation are beginning to appear. However, to utilize the escape from deflation as an opportunity, we need a new economic vision that is not simply an extension of what we have done so far. So we decided to picture new economic possibilities. That is an economy driven by suki, the individual interests. In a deflationary economy, consumers were only concerned with cost effectiveness, but in an economy driven by Suki, the individual interest, people enjoy balanced consumption, spending money boldly on things they like. Companies also grow by creating new markets instead of competing for a limited market and competing on costs. In addition, people who are exhausted because they felt no meaning in their work are finding joy in their work, and young people who are anxious about their future are feeling hope. By transitioning to this new economy, we aim to be a business that goes beyond the dichotomy between impact and profit and achieve high growth and high returns. Based on this, this is a business that supports individual interests. Suki. Up until now, we have aimed to be a business that combines retail, fintech, and co-creation investments. Going forward, we'll shift to a business that supports your interests through events, goods, services, co-creation events, business development, and people, organization, and work styles with fintech at the core.